Option Investor
Play Updates

In Play Updates and Reviews

HAVING TROUBLE PRINTING?
Printer friendly version

Call Updates

Burlington Nor.SantaFe - BNI - cls: 78.61 chg: +1.35 stop: 73.99

As anticipated the railroad sector continued to rally today. The Dow Jones Railroad index rose 2.9%. Shares of BNI rallied 1.7% on above average volume to confirm yesterday's bullish breakout. The MACD is very close to a new buy signal. We don't see any changes from our new play description. Our target is the $84.00-85.00 range. More conservative traders may want to play with a tighter stop loss and exit early near the October highs.

Picked on December 04 at $ 77.26
Change since picked: + 1.35
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 2.5 million

---

B.P.Prudhoe Bay - BPT - close: 76.65 chg: +0.75 stop: 72.45

Oil stocks continued to perform well. Shares of BPT rose almost 1%. More importantly the stock closed over technical resistance at its 100-dma, which is good news for the bulls. Our target is the $79.75-80.00 range. The P&F chart is bullish with an $85 target. FYI: More conservative traders may want to consider tighter stops.

Picked on November 29 at $ 75.25
Change since picked: + 1.40
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 219 thousand

---

Biosite - BSTE - close: 49.94 change: +0.13 stop: 47.49

While it was not the most exciting start the play in BSTE is now open. We were suggesting a trigger to buy calls at $50.05 in an effort to catch a breakout over resistance at the $50.00 level. Shares of BSTE did manage an intraday breakout over $50.00 and an intraday high of $50.25. The play is open for us. More conservative traders may want to wait for a rally past $50.53, which is above the bottom of its May gap down, which might be resistance. Our target is the $54.50-55.00 range.

Picked on December 05 at $ 50.05
Change since picked: - 0.11
Earnings Date 02/07/07 (unconfirmed)
Average Daily Volume = 263 thousand

---

Centex - CTX - close: 56.76 change: +0.95 stop: 52.45

Homebuilder Toll Brothers (TOL) reported earnings today. While their earnings numbers weren't that enthusiastic some of management's comments reinforced the idea that the sector is at a bottom. The DJUSHB home construction index rose 2.39%. Shares of CTX responded with a 1.7% rally and push past the $56 level, which had been acting as very short-term resistance. We have two targets. Our conservative target is the $59.50-60.00 range. Our aggressive target is the $63.50-64.00 range. Be aware that the bottom of CTX's April 2006 gap down near $57.25 might be resistance as may the to of its gap near $60.00.

Picked on December 03 at $ 55.89
Change since picked: + 0.87
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 2.0 million

---

Diamond Offshore - DO - close: 79.36 change: +0.54 stop: 75.75

Shares of DO dipped again but traders bought the dip near $77.50 and its rising 10-dma. The intraday rebound pushed the stock into the green and we see the move as a new entry point to buy calls. Our target is the $85.00-86.00 range near its early July high. The P&F chart points to a $92 target.

Picked on December 03 at $ 80.59
Change since picked: - 1.23
Earnings Date 01/26/07 (unconfirmed)
Average Daily Volume = 3.8 million

---

Enerplus - ERF - close: 46.54 change: +0.51 stop: 43.85

ERF is still inching higher and given the afternoon climb in the stock shares look poised to move higher tomorrow. We don't see any changes from our previous updates. We remain bullish with the stock above $45.00. More conservative traders may want to consider a tighter stop loss. Our target is the $50.00-51.00 range.

Picked on November 29 at $ 46.01
Change since picked: + 0.53
Earnings Date 11/10/06 (confirmed)
Average Daily Volume = 973 thousand

---

EOG Resources - EOG - close: 69.33 change: +0.16 stop: 67.99

If shares of EOG don't start showing some strength soon we're likely to drop it as a play and add another oil company that is moving higher. Today's relative weakness is a surprising following some positive analyst comments on EOG. We would now suggest waiting for a rise past $70 before considering new positions. More conservative traders may want to wait for a new rally past $71.00 before starting new positions. Conservative traders may also want to raise their stops. Our target is the $78.00-80.00 range. The P&F chart has a very bullish pattern called a bullish triangle breakout that points to a $94 target

Picked on November 29 at $ 72.06
Change since picked: - 2.73
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume = 3.6 million

---

General Dynamics - GD - cls: 75.76 chg: +0.46 stop: 71.90

GD posted another gain following yesterday's bullish breakout past the $75.00 level. We don't see any changes from our previous updates. Our target is the $78.00-80.00 range. The Point & Figure chart points to an $82 target. More aggressive traders might want to aim higher than $80 (or $82) given the breakout in the sector index.

Picked on November 29 at $ 74.35
Change since picked: + 1.41
Earnings Date 01/24/07 (unconfirmed)
Average Daily Volume = 1.4 million

---

KLA-Tencor - KLAC - close: 51.58 chg: -0.12 stop: 49.49

Hmm... KLAC displayed some relative weakness with a minor decline versus a decent bounce in the SOX index. The overall pattern in KLAC is still bullish but we hesitate to suggest new positions. Currently our target is the $54.50-55.00 range.

Picked on November 14 at $ 50.81
Change since picked: + 0.77
Earnings Date 01/00/07 (unconfirmed)
Average Daily Volume = 3.9 million

---

KB Home - KBH - close: 52.17 change: +0.75 stop: 47.99

Positive comments from TOL on the state of the housing market lifted the sector and shares of KBH rose 1.45%. We remain bullish with KBH above $50.00. Our target is the $57.50-60.00 range. The P&F chart looks pretty bullish with a spread triple-top breakout buy signal with a $73 target.

Picked on December 03 at $ 52.04
Change since picked: + 0.13
Earnings Date 03/00/07 (unconfirmed)
Average Daily Volume = 2.7 million

---

L-3 Comm. - LLL - close: 83.30 change: -0.51 stop: 79.99

We told readers yesterday to look for a dip in LLL. We'd prefer to buy a dip near $82.00, which is broken resistance. Yet the low today was $82.65. It's up to the individual reader if they want to buy this dip or hope for a deeper one closer to $82. We remain bullish. Our target is the $88.00-90.00 range. The Point & Figure chart forecasts a $104 target.

Picked on December 04 at $ 83.81
Change since picked: - 0.51
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume = 840 thousand

---

Lockheed Martin - LMT - cls: 92.41 change: +0.27 stop: 87.65

LMT continues to show strength. The stock set another record high today. Readers can choose to buy calls here or look for a dip back towards $90.00. We have two targets. Our conservative target is the $94.85-95.00 range. Our more aggressive target is in the $99-100 range.

Picked on November 29 at $ 90.62
Change since picked: + 1.79
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 2.1 million

---

Merck Co. - MRK - close: 45.39 change: +0.69 stop: 43.29

Shares of MRK out performed their peers in the drug sector today. MRK rose 1.5$ and looks poised to challenge its October highs soon. We don't see any changes from our previous updates. Our target is the $49.50-50.00 range.

Picked on December 03 at $ 45.06
Change since picked: + 0.33
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume = 10.3 million

---

Petroleo Brasileiro - PBR - cls: 97.21 chg: +1.63 stop: 91.49*new*

Shares of PBR are setting new six-month highs. The stock added 1.7% and is getting closer to our target in the $98.00-100.00 range. We suggest that readers prepare to exit. More conservative traders may want to exit early right here. We are raising our stop loss to $91.49.

Picked on November 29 at $ 91.51
Change since picked: + 5.70
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume = 2.6 million

---

Research In Motion - RIMM - cls: 135.95 chg: -0.41 stop: 129.99

RIMM continues to consolidate sideways. The lack of upward momentum and participate in the NASDAQ rally is a growing concern. More conservative traders may want to tighten their stops or just exit early to avoid/limit losses. We're not suggesting new positions at this time. Our target is the $142.00 level.

Picked on November 28 at $134.29
Change since picked: + 1.66
Earnings Date 12/21/06 (unconfirmed)
Average Daily Volume = 7.2 million

---

Sepracor - SEPR - close: 57.12 chg: -0.70 stop: 53.61

There was more talk today that Pfizer might consider SEPR an acquisition target. Yet the "news" today failed to lift shares of SEPR. The stock lost 1.2% in profit taking. We remain bullish here but we're not suggesting new positions. Our target for SEPR is the $59.50-60.00 range.

Picked on November 19 at $ 54.69
Change since picked: + 2.43
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume = 2.3 million

---

Thomas & Betts - TNB - close: 53.23 chg: +0.49 stop: 49.90

TNB is still creeping higher. Shares rose 0.9% and the technical picture is improving. The stock is approaching short-term resistance at the $54.00 level. Our target is the $56.00-57.00.

Picked on November 12 at $ 51.36
Change since picked: + 1.87
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 471 thousand

---

Valero Energy - VLO - close: 55.80 change: +0.11 stop: 52.85

Some of the oil stocks took a break from their bullish ways today. VLO displayed some minor volatility this morning with a gap higher and then a dip back to $55.25. Traders bought the dip again but VLO is testing resistance at the 100-dma. We remain bullish given the breakout over $55 so traders can use today's intraday rebound as a new entry point to buy calls. Our target is the $59.50-60.00 range.

Picked on December 03 at $ 55.85
Change since picked: - 0.05
Earnings Date 01/30/07 (unconfirmed)
Average Daily Volume = 14.3 million
 

Put Updates

Genzymme - GENZ - close: 62.95 change: -0.32 stop: 66.05

Yesterday's trading may have been the failed rally under $64 we were talking about. The stock under performed today with a 0.5% decline. Overall GENZ looks vulnerable and we remain bearish with the stock under $64.00, which is now broken support. We are still urging caution about opening new put plays with the major averages hitting new highs for the year. Our target is the $58.00-56.00 range.

Picked on December 03 at $ 62.77
Change since picked: + 0.18
Earnings Date 02/15/07 (unconfirmed)
Average Daily Volume = 1.9 million

---

NewMarket - NEU - close: 61.99 change: -0.15 stop: 62.25

Hmm... the oversold bounce in NEU stalled under its 10-dma today. The afternoon drop back under the 50-dma and the $62 level might be an aggressive entry point for puts. However, we're going to stick to our plan and wait for a breakdown under the 100-dma. Our suggested trigger to buy puts is at $58.25. If triggered at $58.25 our target would be the $52.50-52.00 range.

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/29/07 (unconfirmed)
Average Daily Volume = 275 thousand
 

Strangle Updates

(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)

---

Caterpillar - CAT - close: 62.15 chg: +0.66 stop: n/a

We are not suggesting new positions at this time and don't see any changes from our previous updates. Our estimated cost was about $0.75. We want to exit if either options rises to $1.50. The options in our strangle are the December $65 call (CAT-LM) and the December $55 put (CAT-XK).

Picked on November 08 at $ 60.10
Change since picked: + 2.05
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume = 7.7 million

---

Blue Nile - NILE - cls: 34.92 chg: +1.22 stop: n/a

Ouch! An upgrade for NILE before the opening bell took a bite out of NILE's decline. One analyst upgraded NILE to an "out perform" and the shorts panicked. The stock gapped open at $35.43. Fortunately, it looks like the upgraded was countered with another analyst firm cutting NILE to a "strong sell". Shares of NILE tagged an intraday high of $35.61 before sliding back under the $35 level. We're not suggesting new positions at this time. Our estimated cost was $2.40 and we're planning to sell if either side of our strangle rises to $3.90. The options in our suggested strangle are the January $45 call (JWU-AI) and the January $35 put (JWU-MG).

Picked on October 29 at $ 38.92
Change since picked: - 4.00
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

Play Update Archives